Renovating your home can be valuable – both personally and financially. Upgrading your living space can add functionality and increase the resale value of your home. However, it can also increase your home insurance costs. When it comes to renovations and home insurance it’s always a smart idea to contact your provider and give them the details of your plans. This will keep your insurance policy up to date, and allows your insurance provider to restructure your home insurance coverage to include the new renovations.
Four things you need to know about renovations and home insurance:
Find a reliable contractor
A good contractor can make or break a home renovation budget. When planning your home renovations, it’s important to shop around and meet with at least three different contractors. Schedule an appointment for each contractor to come to your home so they can provide an accurate estimate cost for the job.
It’s also a good idea to meet the contractors in person to see if your visions align. Before signing a statement of work, research the contractor to look for online reviews and ask for references. This will help you find a trustworthy contractor (is that an oxy-moron?) who will get the job done.
Read the fine print during renovations
Are you covered if there’s an accident during renovations? According to MoneySense Magazine the answer is most likely no. “There’s a clause in the vast majority of home insurance policies that eliminates your coverage protection should you undertake a home renovation. So, if a pipe bursts during that bathroom remodel and ultimately destroys the floors on your second floor, you could find out that your claim is denied.”
Contact your insurance provider prior to starting renovations to ensure your home, it’s belongings and everyone on the property, are covered in case of a mishap or accident during renovations.
Ask your contractor if they have insurance
Renovations and home insurance don’t always mix, so homeowners need to take precautions to ensure they’re covered. If your insurance policy is void during home renovations and your provider doesn’t offer the option to purchase additional coverage for a limited period of time during the work, the next step is to ask your contractor.
Contractors often offer to provide insurance for their crew while working on your home. In some cases, they also provide coverage for the materials and your property if there is damage or additional costs due to their wrong-doing. Of course, this is a case-by-case scenario so it’s important to talk with your contractor about renovations and home insurance before signing a statement of work.
Have your property re-evaluated
Once the renovations are complete it’s time to have your property re-evaluated and your home insurance policy adjusted accordingly. Adding major structures, such as a pool, will definitely change the terms of your policy and cost of your insurance premiums. Upgrading the interior living space will also add value to your home and requires the necessary insurance coverage.
The best way for homeowners to ensure you have the coverage you need is to be open and honest with your insurance provider.